We had just pulled into the bus station in Lviv, Ukraine, when the city’s air-raid sirens began to wail. I’d taken an eight-hour trip from Kyiv with Richard Sanders, a U.S. Army veteran who was crisscrossing the war-torn country to collect digital intelligence. Sanders is a volunteer for Ukraine’s national police force, which has become increasingly concerned about Russian operatives being paid in cryptocurrency.
Sanders grabbed his camouflaged luggage, which contained a hidden camera disguised as a car key, a wand to scan for eavesdropping devices in his hotel room, and an array of tourniquets in case of an airstrike. He also carried a stack of cash and a digital wallet on his iPhone loaded with cryptocurrency.
My editor’s directive was clear: Find a bunker at the first warning of incoming drones or missiles. So I flagged a cab to the closest bomb shelter on my map. Sanders, though, had more pressing matters to attend to.
“Sorry to ditch you,” he said. “There are targets I have to hit before close of business.”
His targets were embedded in the country’s vast shadow financial system — where untold amounts of cryptocurrency are exchanged for hard cash, and vice versa, with few questions asked and almost no regulation. He didn’t want to lose any time in making strategic crypto purchases.
I’d come to Ukraine to meet Sanders, one of the world’s foremost experts on these crypto-to-cash operations, which have surged in number not only there but in Hong Kong, Toronto, Istanbul, Dubai and other cities around the world. These services allow holders of cryptocurrency to cash out huge sums without touching the mainstream banking system or its safeguards on dirty money tied to organized crime, human trafficking or foreign sabotage operations. Along with a growing number of researchers, Sanders sees the expanding exchange of often-anonymous cryptocurrency with cash as posing a dire threat to the global anti-money laundering system that has been constructed over decades.
“If you have this way to move money with absolutely zero checks on it, you’re facilitating an unlimited amount of crime,” Sanders said. “I could not have in my worst dreams predicted the reality we’re in now.”
Sanders is a volunteer for Ukraine’s national police force, which has been concerned about Russian operatives being paid in cryptocurrency.
Sanders acted as my guide through this new financial underworld, taking me to crypto-to-cash operations in more than a dozen loosely regulated shops — from gritty backrooms in Kyiv to sleek offices in the upper reaches of skyscrapers in the United Arab Emirates. I witnessed more than $130,000 in transactions with these operators, who rarely asked for identification and, on one occasion, openly discussed handling dirty money.
Along with partner reporters, the International Consortium of Investigative Journalists spoke with more than a dozen cryptocurrency experts and law enforcement officials who expressed deep concern over the rise of a parallel banking system often operating in anonymity and ripe for abuse. This new financial system has successfully evaded regulators and law enforcement alike, hindering investigations with effectively anonymous cryptocurrency addresses — the crypto equivalent of bank account numbers — and scant customer information.
“Seeing the amount of money being pushed through these desks, it’s absolutely staggering,” said Nick Smart, the chief intelligence officer for Crystal, a firm that analyzes public ledgers called blockchains that record most cryptocurrency transactions. “We don’t know who’s using them or why they’re using them.”
Smart has overseen a team that, over two years, has collected intelligence on hundreds of crypto-to-cash operations on five continents. Last year alone, the team found that Hong Kong’s cash desks processed at least $2.5 billion in crypto transactions. Smart says that while there are legitimate uses for the operations such as remittance payments, they’re “a perfect place to operate as a criminal because no one’s going to ask any questions.”
Our investigation also uncovered crypto-to-cash courier services — often arranged on the Telegram messaging app — operating in Miami, Washington, New York, Montreal and London. These services offer to dispatch couriers with bundles of cash in exchange for a customer’s cryptocurrency. Sometimes these services offer a premium for customers taking hard cash. Anti-money laundering experts say this raises a red flag because it indicates that an organization has lots of cash it wants to offload without using a bank. This reporting is part of The Coin Laundry, an investigation by ICIJ in collaboration with 37 media partners. The Coin Laundry exposes how the crypto industry has profited from illicit financial flows while leaving most of those harmed in the process without recourse.
Although cryptocurrency is technically traceable via public records the transactions often create, crypto technology makes it easier than ever to create an anonymous financial account. Crypto-to-cash desks thrive in this financial secrecy, according to Sanders and other experts I interviewed. In an increasingly common scenario, investigators trace illicit asset flows to secretive crypto wallets whose owners they cannot identify and whose assets they cannot seize. Because crypto-to-cash services often use cryptocurrency addresses whose ownership is unknown to law enforcement, attempts to trace illicit transfers often go cold when a money launderer cashes out at such a service, officials said.
Sanders’ obsession with criminals using secretive crypto wallets has erupted in sometimes unhinged social media rants against industry players — including major blockchain analytics firms. He has called the industry “full of grifters and snake oil salesmen” more interested in profiting than identifying criminal wallet addresses.
That anger partly fuels Sanders’ quixotic mission: to collect these addresses one by one in order to reveal their ownership. By performing in-person transactions at as many cash desks as possible, he gathers digital receipts that can offer this information to investigators. Given the rapid spread of these services, that’s a daunting task.
“I feel more in control in a combat setting than in this industry,” Sanders said.
“Here, this is just anarchy.”
Cryptocurrency was established nearly two decades ago in part to create a libertarian form of money without government oversight. The crypto-to-cash desks that I and ICIJ’s partners visited showed one logical endpoint of this development: a world where traditional safeguards against dirty money are openly challenged by a politically powerful industry wielding world-changing technology.
Alona Katz, a prosecutor in New York who leads the Brooklyn District Attorney’s Office’s cryptocurrency unit, told me that her team continually traces the life savings stolen from Russian-speaking scam victims to what she can discern via blockchain analysis are crypto-to-cash services in Ukraine. But then her team often hit a dead end because analytics tools cannot tell them anything further about the operations, such as the exact businesses operating them, or their street addresses, or any contact information. All of this makes recovery of victims’ funds nearly impossible, Katz said, adding, “The next step is calling the victim and giving them the bad news.”
Sanders isn’t alone in his effort to bring cash desks into the light. And, when I accompanied him in Ukraine and the United Arab Emirates, his intelligence collection appeared relentless. Still, the more time I spent with him — and the more I learned about this industry — I couldn’t help but think that his mission might be futile.
‘Smoke and mirrors’
Sanders, a New Jersey native, moved to Ukraine after training its police on crypto investigations in early 2023. From a distance, he blends in with other forest-green-clad officers and security contractors commonly seen on Kyiv’s streets. The cargo pants, quick-dry shirts with zip-up pockets and wraparound Oakley tough-guy sunglasses are a convincing uniform. But a closer look — perhaps at the cartoon Borat “Very Nice” patch on the side of his tactical backpack — reveals he belongs to a command of his own.
Even the comedic references underscore his obsession with cryptocurrency crime. Dressed as Borat and Taylor Swift — albeit with his substantial black beard — Sanders reportedly opened accounts on major cryptocurrency platforms in 2020 while using fake names and bogus IDs. The stunt was designed to expose a serious alleged flaw: that anyone, no matter how ridiculous their disguise, can circumvent verification protocols to obtain a cryptocurrency account. He singled out the cryptocurrency exchange KuCoin for their so-called know your customer, or KYC, checks.
“The fact that anyone, right now, can go onto KuCoin without an ID, choose any name and any ID number, and be approved for the first tier is not KYC,” Sanders told the BraveNewCoin blog in 2020.
At the time, KuCoin disputed Sanders’ claim, but in a guilty plea with U.S authorities earlier this year, the firm admitted it failed to conduct proper customer checks. KuCoin “flouted U.S. anti-money laundering laws by failing to implement effective anti-money laundering” and “know-your-customer (“KYC”) programs,” the Justice Department said.
After settling in Ukraine, Sanders became focused on the proliferation of crypto-to-cash operations dotting the country’s cities. While some were small operations with a single location, others belonged to national chains supported by sophisticated digital infrastructure. Sanders’ primary concern wasn’t the existence of these services but rather the deep anonymity in which they function. Despite cryptocurrency addresses and transactions technically being visible on blockchain ledgers, experts say a huge portion of cryptocurrency addresses remain effectively anonymous strings of letters and numbers, even to law enforcement agents using the most advanced analysis tools.
A bitcoin sign hangs above the entrance to a crypto-to-cash exchange in Lviv, one of dozens of cash desks ICIJ visited across Ukraine.
Governments around the world generally don’t have their own crypto tracing tools, which are essential for such investigations, and instead rely on software provided by blockchain analysis firms. This puts law enforcement agents largely at the mercy of private-sector tools — and the quality of the data those tools contain — to understand which crypto wallet addresses belong to whom. If criminal funds end up at an unknown address, there’s often little even the most sophisticated investigators can do to recover those funds. This is one of Sanders’ biggest fixations: If these data tools fail to properly attribute, or label, the ownership of wallet addresses belonging to criminal groups or crypto-to-cash operations, then they are effectively useless in countless investigations where funds end up at these addresses.
“If you’re not labeling it, then you don’t understand what it is,” Sanders said of cryptocurrency addresses. “So if you don’t understand what an address is tied to, then you can’t call it clean. But that’s the default in this industry.”
According to more than a dozen experts and cybercrime specialists in law enforcement, analytics tools often fail to identify the ownership of addresses used by crypto-to-cash services. Part of the problem is that new and secretive crypto addresses can be rapidly generated at the click of a button.
“The cryptocurrency world is a forest in autumn,” Nick Furneaux, who works at the analytics firm TRM Labs and has written books on blockchain forensics, told ICIJ. “You take a picture, then you take another picture, and a second later that picture will have changed. Leaves will have fallen, breezes will have moved branches.”
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Sanders uses in-person transactions to gather intelligence on crypto-to-cash operations.
Sanders himself has to rely on tools maintained by the rapidly growing private analytics industry he has railed against. There’s no other way he can input and map out the numerous cryptocurrency addresses he collects. According to three people I talked to with knowledge of this data, Sanders has contributed the ownership information of more than 11,200 cryptocurrency addresses to the analytics tool developed by Chainalysis, the multibillion-dollar leader in the blockchain analytics space. This makes him by far the world’s biggest contributor to the part of Chainalysis’ system that allows any user to label crypto addresses on its tool, wiki-style. “He’s done, like, eight in the past two hours,” one investigator told me as he confirmed Sanders’ number of Chainalysis contributions. “He does this all day.”
Several blockchain investigators said that the known addresses of crypto-to-cash desks around the world would barely be recorded if Sanders or a tiny circle of other researchers hadn’t done the work to identify their ownership.
“The industry norm is to pick up analysis tools for optics,” Sanders said. “So much of it is smoke and mirrors.”
‘A money laundering nightmare’
Sanders talked endlessly about the crypto industry but was less interested in discussing his personal life or what he describes as a difficult upbringing that drove him into the military at a young age.
“No one joins the Army at 17 for a good reason,” Sanders told me.
His roles in the military generally involved high-tech battlefield intelligence gathering on enemy target locations in Afghanistan and elsewhere. A few years after he left active duty in 2011, Sanders helped an acquaintance in law enforcement gather evidence for a counterterrorism investigation involving bitcoin, he said, his first time dealing with cryptocurrency. The technology fascinated and terrified him.
“I realized that pretty much if you get scammed or hacked in crypto, you’re f—ed,” Sanders told me. “I also realized if there aren’t people that step up and do this, and do it honestly, this is just going to be a money laundering nightmare.”
In 2019, he established the U.S. branch of CipherBlade, a British firm that has “been at the frontier of blockchain forensics since the early days of the field,” according to its website.
Then, in early 2023, Sanders traveled to Ukraine in part to help its national police on blockchain investigations. Appalled by Russia’s invasion of the country, Sanders had already toyed with the idea of volunteering for Ukraine’s army. He has mostly stayed in the country since, volunteering for the national police.
Pop culture and comedic references — like this Cheshire Cat patch — adorn Rich Sanders’ outfits.
After moving to Ukraine, Sanders’ volunteer work there became a distraction from a startup branch 5,000 miles away that he was still, at least notionally, helping to manage. A breaking point came in June 2023 when Russian forces destroyed Ukraine’s Kakhovka dam, unleashing floodwaters into downstream cities that killed hundreds and stranded others on rooftops. David Shoup, a Kyiv-based American who has volunteered for humanitarian organizations in the country, scrambled to find trucks to carry water filtration systems to the inundated city of Kherson.
“I remember thinking, Maybe this crypto guy has some money,” Shoup told me, referring to Sanders. He was able to track down Sanders, and within an hour Sanders was buying a used 17-seat Ford van for the mission, Shoup said.
Later that day, Shoup and Sanders arrived in Kherson. Shoup said Sanders had enthusiastically agreed to help operate one of the rescue boats, despite shelling by Russian forces across the Dnipro River that had killed some in the vessels. Shoup himself stayed behind. “I was like, ‘Hell no,’” he recalled. “I was not getting in that boat.”
By the time Sanders returned to Kyiv shortly after, his co-managers at CipherBlade had decided to move on without him.
Sanders’ identification of cryptocurrency addresses from crypto-to-cash services has yielded significant results for Ukrainian federal law enforcement, according to Yevhenii Panchenko, first deputy head of the national police’s International Police Cooperation Department. Panchenko formerly helped lead that agency’s cybercrimes division.
“These are really difficult and really unique activities,” Panchenko said of Sanders’ work. “I don’t know another man who has done so much attribution around OTCs” — a common term for the cash desks that do over-the-counter swaps.
Panchenko said that at least in Ukraine, the cash desks operate in a vacuum of regulation and can therefore offer a convenient route for Russia to pay operatives inside the country. He’s hopeful the government will soon enact safeguards on these operations, which he has seen used by a wide variety of bad actors.
“It doesn’t matter what type of crimes you commit or what sphere you operate in,” Panchenko said. “It’s all of them.”
‘The deepest, darkest hole’
Gathering crypto addresses from brick-and-mortar shops in Kyiv proved to be a surprisingly low-tech and time-consuming process. One cash desk we visited was in a drab subterranean casino directly off the city’s central Independence Square. In 2014, the square was the site of a bloody crackdown on protesters by Ukraine’s pro-Russian former president.
The casino was signposted with a rotating “T” symbolizing the cryptocurrency called tether and a “B” representing bitcoin. Here, I did my own transaction. It unfolded with impressive speed. At the counter, a bored-looking woman with flawlessly manicured nails handed me a form to fill out. At first I thought maybe the company was trying to verify my identity. But then I read the form.
“By signing this form, I confirm the Telegram user name listed here,” it read. I put down my anonymous username on Telegram, a messaging service that cash desks often use in Ukraine and elsewhere, and signed the form. That was enough. I sent the desk’s crypto wallet 1,200 tether — a cryptocurrency pegged 1-to-1 to the U.S. dollar — and the clerk handed me a dozen crisp $100 bills, the exact sum, with no fee.
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One of three crypto-to-cash desks on a single city block in Kyiv.
After visiting several more nearby crypto-to-cash operations — including three on a single city block — I arranged on Telegram to visit a cash desk in the back room of a narrow deli. Sanders and I proceeded past a couple buying ice cream to the rear, where I pressed an electronic buzzer on a door labeled “Currency Exchange.”
Two men in polo shirts and wearing Apple watches signaled us into a sparse room and closed the door. A desk was equipped with a cash-counting machine, an old-school plastic calculator and a small cardboard box filled with rubber bands for binding stacks of bills. One of the attendants flashed a QR code that connected my cryptocurrency wallet to theirs for the transaction. I sent 1,200 tether to their crypto wallet. The cash machine shuffled to life, and in an instant one of the men handed me a stack of money wrapped in a thick rubber band. “Welcome to the Wild West,” Sanders said after we stepped outside. “This is a way to move money with absolutely zero checks.”
I discovered that this unassuming business controlled cryptocurrency addresses that together had moved millions of dollars in a matter of months, including some crypto assets linked to a sanctioned Russian crypto service that allegedly enabled the financing of spies and informants globally, according to an analysis of the cash desk’s cryptocurrency address used for my exchange.
In the roughly five weeks around my visit, it moved hundreds of thousands of dollars in tether with an average individual transaction amount of roughly $15,000 — about twice as much as the average Ukrainian’s annual salary
Katz, the New York cybercrimes prosecutor, described herself as “desperate” for information about the otherwise anonymous cryptocurrency addresses that these cash-out services use. For two years, her team has spent long hours tracing cryptocurrency stolen from a growing number of victims, who have flooded her office with cases stemming from sophisticated investment scams. Blockchain analysis tools, Katz said, often fail to provide the ownership data needed to trace stolen funds to these operations, leaving investigators with little more than strings of letters and numbers to go on.
Elderly scam victims who contacted her office after losing their life savings are “contemplating homelessness in their 70s and 80s,” Katz said. “Their entire life was gone in the blink of an eye.”
‘Get into the car, receive cash’
The biggest exception to anonymity in blockchain data are the many millions of addresses created by mainstream cryptocurrency exchanges, which often make their accounts easy to identify in public data.
Cryptocurrency exchanges function as the “banks” of the crypto world, allowing users to deposit, hold and withdraw crypto funds through these centralized services. Paradoxically, some of the same crypto exchanges that investigators rely upon to trace illicit funds have reaped enormous profits from moving billions in dirty money.
These funds came from terrorists, fentanyl traffickers and money laundering organizations. Visits to more than a dozen cash desks raised questions: Do the major crypto exchanges have any idea where the money is going when they send big transactions to high-risk cash desks? And do they care?
An analysis of wallets collected by ICIJ from more than a dozen cash desks indicates that customer accounts at major exchanges, including Binance, Bybit and OKX, are significant senders of large-dollar amounts to these operations that often asked for no client identification.
Major crypto exchanges proclaimed their compliance efforts to ICIJ. But ICIJ also found multiple examples of exchange customers transacting with cash desks that often asked for no client identification.
Binance did not address questions about its transactions with cash-heavy businesses directly but said that it is an industry leader in compliance. Binance “dedicates over 1,280 employees and invests millions of dollars every year to provide a safe and trustworthy platform for users,” and “works hand-in-hand with law enforcement agencies around the world on investigations of every nature, proactively blocking and tracing funds originated from illicit activities.”
Bybit did not provide comment about its transactions with cash desks. In response to questions on the desks, OKX said it has robust compliance controls. The firm said it “works closely with law enforcement agencies worldwide and operates multiple dedicated teams focused on detecting, investigating, and preventing sophisticated financial crime and the networks that underpin it.”
A crypto investigator shared with me a wallet address associated with a crypto-to-cash desk in Armenia that he had visited with Sanders earlier this year. (The investigator asked to remain anonymous for safety reasons.) This operation used a wallet address that had, over two years, racked up more than $160 million in tether transactions. The operation’s wallet address has received some funds directly from the now-sanctioned Russian exchange Garantex, according to an analysis of the wallet address’s activity. But the wallet’s activity also included major incoming transactions from Kraken, one of the United States’ largest exchanges. In July 2024, a Kraken account sent the wallet associated with this Armenian cash desk seven transactions amounting to more than $2.1 million.
Kraken did not respond directly to questions about whether the exchange knew what kind of business owned this wallet address. Kraken did say that it cooperates with law enforcement and that it maintains “rigorous know-your-customer and due-diligence procedures at onboarding and throughout the client relationship.” The firm also said that it monitors all deposits and withdrawals.
I also set up an anonymous Telegram account to converse with two crypto-to-cash courier services advertising in the United States. Each said it could execute cash drop-offs in major American cities in exchange for cryptocurrency.
The “courier arrives at the agreed point by car, you get into the car, receive cash and count it,” a group called 60Sek told me on Telegram in response to a question about how the system works in New York City. The blockchain tracing firm Chainalysis has identified 60Sek as having close links to the Russian financial system.
A Toronto Star reporter used Telegram to arrange a cash exchange through 001k, with no identity documents required.
ICIJ and partner reporters also communicated via Telegram with 001k.exchange, a Ukraine-based firm that offers crypto-to-cash courier services in major cities around the world. This includes Montreal, New York, Los Angeles and Miami — places it does not have a money transmitting license.
001k did not provide comment for this story.
In early November, as part of the Coin Laundry investigation, a reporter for the Toronto Star communicated in an undercover capacity with 001k over Telegram and sent the firm 2,000 tether to exchange for cash. Instead of asking for a customer name or ID, the service asked the reporter to take a photograph of the serial number on a five-dollar bill and then instructed her to present the same banknote at the cash hand-off to prove herself to be the same person who had provided the crypto. According to experts interviewed by ICIJ’s Canadian reporting partners, this transaction likely violated Canadian anti-money laundering laws.
001k is no small operator. Since August 2022, it has received more than $14.8 billion in cryptocurrency, according to data Chainalysis provided to ICIJ. It is unclear what portion of this total is composed of courier services versus other exchanging services that 001k provides.
ICIJ found that 001k accounts have in turn sent significant sums to major cryptocurrency exchanges. Over the past two years, customer accounts at Binance received more than $400 million in crypto transactions from 001k, and such accounts at OKX received more than $54 million from the organization, according to an ICIJ analysis of data contained in the blockchain tool Arkham Intelligence. Customer accounts at Kraken received more than $13 million from 001k accounts, while customer accounts at WhiteBIT received more than $1.1 billion from the service, according to the analysis.
Kraken and Binance did not respond directly to questions about 001k but said they have robust compliance systems. WhiteBIT and OKX did not comment on the transactions.
Both over Telegram and on its website, which displays courier exchange rates, 001k offered to pay people to provide it with cryptocurrency and receive cash. For instance, in late October 001k was offering to provide customers in New York City $10,001 in physical cash in exchange for 9,757 tether.
“This indicates a connection to a criminal syndicate that needs to offload cash,” says Pamela Clegg, a blockchain investigations expert who has done work for crypto firms and traditional banks. “Especially if they are paying people to take their money.”
‘It’s like hidden money’
In late September, I met Sanders in Dubai, United Arab Emirates, a glittering city where sanctioned Russian oligarchs, deposed dictators and indicted crypto charlatans vanish with their fortunes into opulent anonymity. In other words, the perfect place for Sanders to resume reconnaissance for a few weeks.
He had come to collect crypto wallet addresses via numerous test transactions at crypto vendors across the city. He wouldn’t tell me who exactly he was working for, but someone had evidently given Sanders a significant budget. In addition to being a top destination for suspect wealth, Dubai has one of the highest rates of crypto use on Earth, according to crypto analysts. And Sanders saw it as an ideal opportunity to uncover abuse.
Dubai is a renowned haven for financial secrecy, and has also become a thriving hub for cryptocurrency transactions.
“If I’m a criminal in Dubai and I have a crypto wallet with 10, 20, however many million in USDT, it’s simple. I can get whatever I want,” Sanders said, using the common abbreviation for tether. “Charter a yacht? Done. Rent a f—ing car? Done. Want a hooker? Here’s a f—ing crypto wallet to pay for that. You want gold? Here’s a f—ing wallet.”
A cab took us to a sleek complex of three-story buildings devoted to the wholesaling of gold bars, diamonds and jewelry. Sanders walked into a shop that looked no different from any regular jewelry store, but he saw it as an intelligence target — a place where a criminal could discreetly change crypto into rectangular gold bars worth tens of thousands of U.S. dollars. To obtain the shop’s cryptocurrency address, Sanders bought a 100 gram-gold bar for 13,000 tether. A few doors away, a jewelry shop was selling individual diamonds in neat plastic packaging. Sanders had visited the shop a few days earlier and struck up small talk with the seller about the wonders of cryptocurrency.
“It’s the safest way, paying with the crypto,” the man had told Sanders. “It’s like hidden money.”
The city was also dotted with crypto-to-cash businesses. They operated from tiny offices on the upper floors of skyscrapers, in shabby storefronts and inside glass-walled co-working spaces. One was nestled in the back of an art gallery of sorts selling particularly gaudy pieces, including a portrait of Elon Musk holding a golden bitcoin.
At a cramped desk, under the gaze of 15 surveillance cameras, a woman told me the maximum they could convert to hard cash on the spot was 200,000 tether. Another crypto-to-cash changer, a Russian man with muscles threatening to burst from a tight-fitting tan polo, was visibly unimpressed with Sanders’ $5,000 crypto-to-cash exchange. “One day, you can take me 30,000 USDT,” he said.
In addition to crypto-to-cash desks, Dubai also offers crypto-to-almost-anything — including luxury cars, superyacht experiences, gold and more.
Sanders described visiting a crypto-to-cash operation inside a residential apartment in Dubai the day before I arrived, where the glares of his three counterparties left him concerned they’d turn violent if they discovered his real motivation.
“It was me and two beefy Russian dudes and this f—ing dominatrix-looking f—ing Russian chick,” Sanders said. “I wouldn’t describe them as being overly warm.”
I asked if he could take me there. Sanders didn’t hesitate. “Sure, I can bring a knife this time,” he said. I dropped the idea.
In the city’s tony marina district, I found my way into the sleek office where deals were completed for ultra-luxury waterfront condominiums, some with trophy berths for yachts.
“We do take crypto, yes, but not officially,” the representative with long green nails told me.
Several yacht-chartering firms told me that they took tether. Same with a private helicopter service. Sanders had already collected several of these cryptocurrency addresses. He pointed to one where his blockchain analytics tool detected a torrent of money pouring into a yacht charterer’s crypto address from a cryptocurrency scam operation.
“Someone literally took scam money and used it to go out on a f—ing yacht,” Sanders said.
One evening, as I was in a cab back to my hotel in Dubai, I called my editor to discuss my odds of renting a Lamborghini using cryptocurrency. The answer was a definitive no. My cabdriver, a middle-aged Pakistani man, had been listening and chimed in.
“Sir, if you’re having trouble renting the Lamborghini, I have a friend that can do it — any type you want.” I asked if his friend would take payment in cryptocurrency. “Of course!” the driver said, and provided a WhatsApp number.
The multitude of cryptocurrency off-ramps in Dubai was dizzying, and Sanders was trying to collect them one by one. As the days went by, he began to fray.
“This is a completely impossible task for one person,” he told me. “I am exhausted.”
Making matters worse for Sanders’ mission, crypto-to-cash desks in Dubai had adopted more sophisticated methods to evade digital tracking than he was accustomed to in Ukraine. Some desks, he said, were generating new crypto wallet addresses every other day with which to conduct their business. These frequent wallet changes were nearly impossible to keep up with because he needed to visit with the services to obtain their new addresses. In many cases, the intelligence he collected was becoming obsolete in a matter of weeks or even days. One Russia-linked chain of cash desks in the city was changing its wallet addresses so often that keeping its blockchain attribution updated “would require somebody to go and transact every single day,” Sanders said. “There’s absolutely no legitimate reason why an OTC should be cycling wallets. That should just not be tolerated.”
On the 41st floor of a blue glass office tower, in a narrow office with no sign on its door, a friendly man wearing a gray pinstripe blazer and Adidas sandals sat in a swivel chair in front of a sweeping view of the city. He opened a drawer filled to the brim with neat stacks of cash. Sanders noted the business was changing its wallets often, like others in Dubai.
“We are meeting so many people from where we are getting our USDT, and sometimes we can get some fishy coins,” the man explained. For customers giving cash in exchange for tether, the tainted wallet that had dealt in those fishy coins can be a problem for that customer’s own account. “Your account will get blocked,” he said. “We don’t want that for our customers.”
But in crypto, he explained, there were easy solutions. Having an account tainted with dirty money wasn’t a problem. He could just create a fresh wallet on his smartphone, the man said, adding that the business changed its wallet addresses every 10 to 15 days. An analysis of the crypto address he used to process Sanders’ transaction showed that it had received more than $2 million in cryptocurrency in the two weeks that it was active.
Back outside, Sanders settled into the cab, opened his laptop and looked at the crypto address he’d just collected.
“This is a clusterf—. There’s no way to trace this activity,” he said, exasperated. “I’ll have to keep coming back.”
But I wondered: Was this labor- and cost-intensive strategy of repeatedly visiting the operation realistic? And who would keep visiting that desk to collect its new crypto addresses after Sanders left Dubai?
I considered the future we’re already living in: a world where creating anonymous accounts was no longer a specialty of dodgy law firms in the Cayman Islands or Bermuda practicing the dark arts of financial secrecy, but available to anyone with a smartphone at the click of a button — and on a practically unlimited scale. Even if Sanders had a whole team deployed in Dubai, their work would be endless, it seemed to me. It can take a person an hour — and access to significant funds — to travel to a cash desk and do a transaction, while it can take a crypto vendor a mere moment to create a new wallet address for free.
I didn’t think Sanders was ready to accept it, but the war he had been waging against anonymity in crypto seemed impossible to win. Then, two weeks after I returned from Dubai, he sent me a message. His time in Dubai had led him to a new state of despair, he wrote. “I am finally at a point of watching the world burn.”
Contributing reporters: Sheila Wang and Emma McIntosh (The Toronto Star), Hugo Joncas (La Presse), Frédéric Zalac, Jeff Yates and Yanick Rose (CBC/Radio-Canada), Agustin Armendariz, Kathleen Cahill, Miguel Fiandor Gutiérrez, Delphine Reuter, David Rowell, Fergus Shiel, Dean Starkman, Tom Stites, and Angie Wu (ICIJ)
Photos: Yurko Dyachyshyn, Katarina Premfors, Spencer Woodman, Getty Images
Design and development: Antonio Cucho
